Job Creation Current Affairs - 2019

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Examining the Government Data on Job Creation

The Prime Minister while addressing the Lok Sabha made the following claims about the creation:

  • New jobs were created in the unorganised sector, which accounts for 80-85 per cent employment.
  • PM cited an increase in the sale of commercial vehicles, infrastructure building and housing activities as evidence for the claim.
  • PM further said that 1.8 crore people had enrolled in the Employees’ Provident Fund (EPF) in the past 15 months, and 64 per cent of them, who were below the age of 28 were first-time employees.
  • PM also cited data showing an increase in the registration of employees under the National Pension Scheme (NPS) from 65 lakh in March 2014 to 1.2 crore till October 2018.

Why the critics claim this argument as flawed?

The critics refuse to buy these data on job creation based on the following grounds:

  • Considering the EPF enrolments as a reflector of job creation is not correct as it can be the formalisation of informal jobs.
  • Enrolment for the EPF does not necessarily mean that the person has got a job. It is most likely that the person has enrolled for the EPF for the first time though he/she had a job for a long time.
  • As per the law, an employer with 20 people or more is required to register with the EPFO. If a firm had 19 employees till yesterday and today 20th person joins in, then all 20 would be enrolled for the first time. Hence what is perceived as 20 jobs created is actually one.
  • PM also said that new 6.35 lakh new non-corporate taxpayers such as doctors must have provided jobs in the past four years. Experts call it “incomprehensible” in the absence of the source of the data.
  • As per data from CMIE India’s unemployment rate shot up to 7.4 per cent in December 2018 and the number of unemployed increased by a substantial 11 million – the highest in 15 months.

Further critics cite the alleged data from the NSSO survey which is said to be withheld by the government. It is said that the report puts the unemployment rate at 6.1 per cent in 2017-18, post-demonetisation. It is the highest level of unemployment since 1972-73 – the period since when the jobs data is comparable.

Month: Categories: Business, Economy & BankingUPSC

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Nikkei India Services Business Activity Index: Key Facts

The seasonally adjusted Nikkei India Services Business Activity Index report makes the following observations about the Services Business Activity in India:

  • The index witnessed a drop for the second straight month in January to 52.2 from 53.2 in December.
  • The fall indicates a softer expansion in output.
  • The growth was supported by favourable public policies, enhanced capacities and greater demand.
  • The upturn was curbed by competitive pressures and election uncertainty.
  • The report notes that a sharp and accelerated rise in manufacturing production counteracted the slowdown in activity growth across the service economy.
  • The report notes that Business activity growth in the Indian service sector cooled further at the start of 2019, amid the weakest upturn in new work since last September.
  • Optimism regarding the outlook was sustained and the companies have continued to hire. The job creation was at a three-month high
  • Even though the inflation rates remained mild by historical standards, the costs rose to a greater extent than in December.
  • There was a moderate increase in sales that was the weakest in four months. The slowdown was centred on the domestic market as new orders from abroad grew to the greatest extent since last September.

Expansion rates in the Indian service sector have been at similarly modest levels for the past four months and the data for January extends the trend. There is some sign that growth may run out of steam, in the short-term at least, as seen by the weakest improvement in demand for four months and relatively subdued optimism.

Month: Categories: Business, Economy & Banking

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